SUBJECT:

Update on UCSD's Travel Program

A key element of UCSD's travel program is our preferred travel agency,
Balboa Travel, which became UCSD's first such agency in 1994 after a formal
solicitation process. Balboa has successfully provided many advantages for
travelers including competitive rates, an understanding of policy and
culture, a no service fee policy, a dedicated reservations team, and group
discounts. As our agreement with Balboa will be ending, a Request for
Proposal (RFP) for a new full-service primary agency will be issued as well
as a secondary RFP to identify agencies that would like to participate in
our program but not as the primary supplier. A self-booking reservation
system which will provide an on-line alternative for making travel
reservations and ticketing is also being planned.

During the past four years, changes in the travel industry have permanently
altered the airfare distribution process changing the role of the agency
from being a broker to being a service provider. In the past, an agency's
primary source of revenue was generated from the commissions received from
the airlines. In 1995, airlines capped commissions to limit the maximum
amount earned by an agency and further restrictions were imposed in 1997.
Agencies are now generally charging a service fee when the cost of
ticketing exceeds commission earnings. Travelers using an agency other
than Balboa might have recently noticed these fees.

The new program will address the industry changes and support our goal for
economizing and enhancing travel services. The objectives of the RFPs are
to provide the option for using an agency that best meets a traveler's
business needs whether it is either the primary agency for which we will
have a favorable financial agreement (no fees) or for using one of the
other agencies whose fees and profile will be published on our web site.

Additional goals of our new program include:

*acquire reduced airfares, hotel, and car rental rates by leveraging UCSD's
buying power based on the collective volume of business by our travelers to
negotiate discounts and to obtain optimum travel service;

*allow for enhanced data management enabling UCSD to continue to improve
relationships with suppliers and fulfill airline requirement that a primary
travel agency be in place before contracts can be negotiated and awarded;
and

*provide on-line interfaces to facilitate communication between travel
preparers, UCSD's Travel Office, and our travel service providers to
strengthen relationships and promote quality customer service.

When the formal solicitation process begins this fall, interested agencies
will be encouraged to respond to either one or both of the RFPs.
Information about the solicitation process will be available at:
http://www-bfs.ucsd.edu/dis/travel/home/index.htm. Click the "Travel Agency
RFP" button on the left side bar to access this information.

We would appreciate receiving your comments, suggestions, and questions
about our program. You can conveniently provide feedback by taking our
Travel Poll, on our web site:
http://www-bfs.ucsd.edu/dis/travel/home/index.htm.
Click the "Travel Poll" button located on the left side bar and when you
have completed and submitted the form, it will automatically be e-mailed to
the Travel Office. Questions and comments may also be directed to me at
mccullof@ucsd.edu.

Faye E. McCullough Manager Disbursements Division